Operational Planning Model

Question 1

Side Letters for Carried Interest

Answer 1

Are additional agreements negotiated between a general partner and limited partners in a private equity or venture capital fund, specifically addressing the terms of allocation and payment of carried interest. These agreements customize the distribution waterfall and may include provisions such as preferred returns, GP clawback provisions, and co-investment opportunities for certain limited partners.

Question 2

Side Letter for Management Fees

Answer 2

An additional agreement or provision negotiated between a general partner (GP) of a VC fund and specific limited partners (LPs) regarding the terms and conditions related to the payment of management fees.

Question 3

SSBCI Funding

Answer 3

Small Business Credit Initiative, a government program that provides capital to venture capital funds or small business investment companies (SBICs) to support investment in small businesses and startups.

Typically require 1.71% management fees

Question 4

K1 Tax Form

Answer 4

a document that reports an individual’s share of partnership income, deductions, and credits, which they must include in their personal tax return.

Shows realized and unrealied gains for each LP.

Question 5

Look Through Event

Answer 5

Refers to a situation where a limited partner (LP) in a fund is deemed to have a direct ownership interest in the underlying portfolio companies held by the fund, rather than only an indirect interest through the fund. This can have implications for the LP’s tax treatment and regulatory requirements, as they may be subject to reporting and compliance obligations at the portfolio company level.

Question 6

Fund Budegt

Answer 6

Ment to show all expenses related to the fund

Question 7

Fund Waterfall

Answer 7

Models out GPs liquidations

Question 8

Warehoused Investments

Answer 8

Temporary holdings of investments by a venture capital firm prior to transferring them to a dedicated fund or vehicle. These investments are typically acquired by the VC firm before establishing a specific fund and are held temporarily until they can be transferred to the appropriate investment vehicle for long-term management and capital appreciation.